The Institute for Energy Economics and Financial Analysis has released a short report entitled CCS For Power Yet To Stack Up Against Alternatives, arguing that “recent price inflation may force governments to rethink their support for CCS, adding to financing risks”. As the title suggests, the analysis is on the power sector only, and it finds that on a levelized cost of electricity (LCOE) basis, the cost of power with CCS is at least 1.5-2.0 times above current alternatives, such as renewable energy plus storage.

The report states that “not only is [CCS] unable to consistently deliver on performance claims, expensive to build and fraught with failures, but the impact on electricity prices if the cost is passed through to consumers would be unsustainable.” It points out that no new power plants have been built that incorporate CCS from the outset, and that of the two operating power plants with CCS (the 115 MW Boundary Dam Unit 3 in Canada and the 240 MW Petra Nova in the USA, both retrofits), “one has since suspended operation and both projects had performed well below target capture rates of 90%.”

The report also estimates that “if CCS is applied with all costs borne by increasing the electricity price, then annual volume weighted average wholesale prices could increase by 95% to 175% in Australia.” Furthermore, there is criticism that stated costs for power generation with CCS do not always include the full costs of transport, storage and monitoring, and that the Global CCS Institute’s “estimate of CCS costs is a long way from the estimates of other prominent organizations, and a long way from the likely reality.”

Environmental criticisms of CCS as applied to power are also listed, including:

• “the continued use and promotion of fossil fuels through association with enhanced oil recovery conflicting with the decarbonization agenda” 
• the uncertainty and risk around the long-term storage and leakage of CO₂
• the chemicals demand of CCS
• the additional water demand of CCS.

These criticisms and findings are justified to some extent, and numerous studies have found that on a LCOE basis, renewables (without storage) are significantly cheaper than fossil fuels with CCS (and even without). Still, the report doesn’t quite present the full picture, and would benefit from:

• Making the analysis on a basis that includes system effects, such as the Levelized Full System Costs of Electricity. Such bases take into account the value of overall system stability, and are thus a better measure to assess technologies. Most studies find an added value for dispatchable power, especially at high proportions of renewables.
• Properly acknowledging that with additional deployment of CCS, costs per unit of energy (and unit of captured carbon) will fall. This is shown to some extent in the report in that the capital cost in US$/kW were around $10,000 in 2014, while in 2017 for Petra Nova these were closer to $3,000-$3,500. (The report makes a similar, and perfectly justified case that battery storage costs will fall with deployment.)
• Taking into account in sensitivity analysis that fossil fuel prices, currently very high, can also fall.
• That CCS-equipped power generation may only comprise a small fraction of the future energy mix, perhaps retrofitted to existing power plants, and therefore not contribute heavily to increased grid electricity costs.

It is also worth noting that many analysts see the main applications of CCS not in the power sector but in more difficult to abate sectors, such as steelmaking, cement production, chemicals manufacture and glassmaking. This is borne out by the information contained in the International Energy Agency’s recent release of its CCUS Projects Explorer.

As can be seen in the data, of the installed capacity of CCS in 2022, power and heat made up only a few percent of projects; while this is projected to expand by 2030 to something like 20% of CCS capacity, other applications such as hydrogen and ammonia production, natural gas processing, biofuels and other fuel transformation, and cement making will also be significant, as capacity roughly triples (excluding projects that may be announced from now until then).